Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Nvidia just paid $20B for a company that missed its revenue target by 75%

blog.drjoshcsimmons.com

Post reply on HN
Print view View original

21–30 of 207 posts

Re: Nvidia just paid $20B for a company that missed its revenue target by 75%

#21

Post by DicIfTEx »

wyldfire wrote: post #8

> I don't understand how market regulators allow this. The US government is literally for sale. Businesses know that this window is limited and are executing antitrust manuvers left and right while they can.

Under current DoJ antitrust guidelines, there's nothing to stop a future administration from reviewing any anti-competitive actions ignored by the current one as part of an anti-competitive series of actions: https://www.justice.gov/atr/merger-guidelines/applying-merge...

So those businesses either know, or expect, that either:

a) these guidelines will be changed in a way that makes them hard or impossible to revert (i.e. through legislation or a Supreme Court judgement); or

b) there is little risk of a future change of administration.

Re: Nvidia just paid $20B for a company that missed its revenue target by 75%

#22

Post by klelatti »

> Then in maybe one of the best rug pulls of all time, in July they quietly changed their valuation to $500 million. A 75% cut in four months. I’ve never seen anything like that since the 2008 financial crisis.

Not sure where the author is getting their information from but there is seemingly little correlation between the investment rounds quoted in this post and other online sources. No mention for example of the Series E that valued Groq at $6.9bn.

Re: Nvidia just paid $20B for a company that missed its revenue target by 75%

#23

Post by oh_my_goodness »

xgulfie wrote: post #15
oh_my_goodness wrote: post #14

Earlier quoted context omitted.

I don't understand what "low risk" means here. For a start-up, 99% risk of failure is low. What are we comparing that to?

Well usually they only get acquired when they have something the purchaser wants, revenue was obviously not the get here

I don't exactly disagree. But the word "obvious" doesn't work very well during a bubble. Sure, yes, the current revenue doesn't justify the purchase price. But that doesn't mean that anything justifies the purchase price.

We can't work backward rationally from "this deal makes sense" and get to "here's why". Corporate acquisitions often don't work that way, even when there's no bubble. The price is often just not justified at all. By anything.

In many cases they're just capitalizing testosterone.

Re: Nvidia just paid $20B for a company that missed its revenue target by 75%

#25

Post by dragonwriter »

DicIfTEx wrote: post #21
wyldfire wrote: post #8

> I don't understand how market regulators allow this. The US government is literally for sale. Businesses know that this window is limited and are executing antitrust manuvers left and right while they can.

Under current DoJ antitrust guidelines, there's nothing to stop a future administration from reviewing any anti-competitive actions ignored by the current one as part of an anti-competitive series of actions: https://www.justice.gov/atr/merger-guidelines/applying-merge... So those businesses either know, or expect, that either: a) these guidelines will be changed in a way that makes them hard or impossible to revert…

Or (c) that any future administration is going to have a lot of more pressing concerns that will drown out seriously relitigating past mergers and acquisitions, and any concerns they do have will most likely be mollified with agreed remedies that sacrifice far less than the value of doing the merger.

Very few administrations do everything they theoretically could under the law and their own guidelines (even the ones that also do lots that violates both.)

Re: Nvidia just paid $20B for a company that missed its revenue target by 75%

#27

Post by klysm »

oh_my_goodness wrote: post #14
gmerc wrote: post #13

Ya well, startups are just low risk R&D facilities in service of big tech now https://centreforaileadership.org/resources/opinion_startups...

I don't understand what "low risk" means here. For a start-up, 99% risk of failure is low. What are we comparing that to?

Low risk for the large companies

Re: Nvidia just paid $20B for a company that missed its revenue target by 75%

#28

Post by lostlogin »

xgulfie wrote: post #15
oh_my_goodness wrote: post #14

Earlier quoted context omitted.

I don't understand what "low risk" means here. For a start-up, 99% risk of failure is low. What are we comparing that to?

Well usually they only get acquired when they have something the purchaser wants, revenue was obviously not the get here

The tv series Silicon Valley has a good episode where they discuss the importance of a start-up not having any revenue. Being pre revenue apparently means unlimited potential, with any level of revenue being bad, as you always have to grow it.

Re: Nvidia just paid $20B for a company that missed its revenue target by 75%

#29

Post by beart »

DicIfTEx wrote: post #21
wyldfire wrote: post #8

> I don't understand how market regulators allow this. The US government is literally for sale. Businesses know that this window is limited and are executing antitrust manuvers left and right while they can.

Under current DoJ antitrust guidelines, there's nothing to stop a future administration from reviewing any anti-competitive actions ignored by the current one as part of an anti-competitive series of actions: https://www.justice.gov/atr/merger-guidelines/applying-merge... So those businesses either know, or expect, that either: a) these guidelines will be changed in a way that makes them hard or impossible to revert…

A quick google search indicates the average tenure of a CEO is ~7 years.

I wonder if there should be a c) There is a lack of meaningful planning beyond the current status quo.

Post reply on HN